Money as a Domain of the State

Heiner Flassbeck and Paul Steinhardt

Chapter 4 in Failed Globalisation:Inequality, Money, and the Renaissance of the State, 2020, pp 151-203 from World Scientific Publishing Co. Pte. Ltd.

Abstract: In our search for the market economy that liberals dream of, we have collided with hard and unpleasant realities. We explained in the previous part that the “labour market” is a fiction. The price of labour cannot be a market result because the assumption that independent supply and demand functions exist in the arena of labour relations has nothing to do with reality.It has also been shown that the so-called financial markets, in particular foreign exchange markets, are generally not in a position to find prices that can be regarded as efficient. Are these mere market imperfections, or have we come across indications of problems that might require us to generally call into question a market-centred organisation of the monetary and financial system? In other words, can we trust the market to do a reasonable job ofallocating financial capital? Can the market interest rate ensure that capital is managed in the public interest? Does it make sense for the allocation of "capital" to be oriented towards achieving the highest possible financial profit, and for capital investors to compete with each other for solvent creditors?Finally, we must also answer the question of whether the so-called independence of central banks, which has become a matter of iron doctrine in many countries, can be justified.

Keywords: Globalisation; Macroeconomics; International Economy; Inequality and Consumption; International Relations; Monetary Relations; National Economic and Social Policy; International Trade; Protectionism (search for similar items in EconPapers)
JEL-codes: F01 F02 F4 F62 (search for similar items in EconPapers)
Date: 2020
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